the first technical challenge with genetic modifications. Ding and his colleagues discovered a way to use genetically engineered protein drugs that could coax adult cells into a pluripotent state without the danger of using cancer-causing genes delivered by viruses. That work was published in the journal Cell Stem Cell.

Five months later, Ding has taken another big step ahead that could make stem cell research much more practical for pharmaceutical companies, says Fate Therapeutics CEO Paul Grayson. As anybody who follows the biotech industry knows, genetically engineered protein drugs—like Amgen’s etanercept (Enbrel) or Eli Lilly’s cetuximab (Erbitux)—are expensive to manufacture. Essentially, using proteins like that to induce a pluripotent state would be cost-prohibitive for what Fate wants to do. That’s why Ding’s team went on a search for small molecules that would do the job.

Fate envisions using induced pluripotent stem cells—at least in the early days of the field—primarily to support basic research into the discovery of new drugs. The rationale is that if you can create new neurons in a lab dish that are like neurons harvested from the human brain, then that could be a very useful platform for testing new drugs designed to deter or reverse the changes associated with Alzheimer’s, multiple sclerosis, or Parkinson’s. Further in the future, induced pluripotent stem cells that have been made to differentiate into neurons might be injected into people as regenerative treatments.

So if Fate is going to create a method for churning out these valuable induced pluripotent cells, it will have to be fast, cheap, and reproducible, like all good industrial processes. That’s why Ding’s paper today is so important, Grayson says. Small molecule compounds are really cheap and readily available compared with genetically engineered proteins.

“This is Sheng’s next big leap forward,” Grayson says. “It makes the whole process much more efficient.” With small molecules, Grayson adds: “We’re talking about dollars per gram instead of tens of thousands of dollars,” as with genetically engineered proteins.

But the researchers aren’t getting carried away with excitement; lots of big challenges remain. One of the critical ones is with what scientists call “heterogeneity,” which essentially means they need to make sure they’re getting consistent results. For example, the FDA would want to be absolutely certain that induced pluripotent stem cells can be differentiated into, say, neurons with uniform consistency, so that it knows exactly what is being injected into a person.

Fate isn’t trying to pretend that it has the process of making induced pluripotent stem cells completely nailed for pharmaceutical industry grade experiments. “As Rudy Jaenisch has said, you can wait for it all to be figured out and miss the boat, or you can work on it now and help shape it,” Fate spokeswoman Jessica Yingling told me last month, citing remarks by MIT and Whitehead Institute biologist Rudolf Jaenisch, an advisor to Fate.

It will be very interesting to see if this latest paper by Ding, and the speed and efficiency gains it may represent, will be enough to get Big Biotech and Big Pharma to jump on the bandwagon with Fate, and start to help shape it, to use Jaenisch’s phrase. After all, Fate has raised $25 million in capital since its founding, and it is growing fast. With ambitions like this, it will definitely need more capital. Grayson was a bit cagey about what the new results mean for his ability to do deals with pharma companies, but he did say, “It’s great for the field, and for Fate Therapeutics in our relationship with Big Pharma.”